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A large, innovative desert solar project designed to provide power to San Diego won final federal approval Tuesday.

"We have opened up a new chapter on renewable energy," Interior Secretary Ken Salazar said moments after signing a permit for the 10-square-mile Imperial Valley Solar project 95 miles east of San Diego.

The Imperial County project, and another, much smaller one in San Bernardino County, are the first large-scale solar projects on federal land, he said.

San Diego Gas & Electric is counting on the 709-megawatt project to help provide a big chunk of the power it will need to meet state clean-energy requirements.

State law requires utilities to get 20 percent of their electricity from the sun, the wind and other renewable sources by the end of the year. Recently passed rules have upped that requirement to 33 percent by 2020.

The contract for power from the plant is SDG&E's single largest renewable energy commitment.

The first 300 megawatt phase of the Stirling project would provide 18 percent or more of such electricity SDG&E will sell in the next few years, about 3.7 percent of total retail sales, spokeswoman Jennifer Ramp said.

The project, on 10 square miles of Bureau of Land Management property, is being developed by Tessera Solar and Stirling Energy Systems, both subsidiaries of NTR, an Irish conglomerate.

Stirling Energy is using automotive manufacturers in the Midwest to make the engines. Tessera is the development arm.

It is scheduled to begin construction soon, with power production expected by the end of next year.

In his announcement, Salazar highlighted efforts to protect wildlife while making power in the desert.

The approval "will require that we actually not only move forward with the agenda for renewable energy, but also move forward the conservation agenda for the United States," Salazar said.

The projects are an example of how environmental organizations can work with developers to deal with issues they both care about, said Johanna Wald, a lawyer with the Natural Resources Defense Council.

The Imperial Valley project posed problems because of its technology and impact on the land, she said. But changes have dealt with those concerns.

"Today it serves as an example of what can be accomplished when parties are committed to finding solutions to such issues," she said. "During the federal and state reviews, Tessera Solar moved the project out of sensitive desert washes, scaled it back to 709 megawatts, to reduce important impacts."

The NRDC joined Defenders of Wildlife and the Wilderness Society, other groups which initially opposed the project, in reaching an agreement with developers.

Not all environmentalists are happy with the result.

"It's still displacing good habitat," said Ileene Anderson, a biologist with the Center for Biological Diversity. She said her group hasn't decided whether to go to the courts in opposition to the project.

In a statement, Gov. Arnold Schwarzenegger praised the work that went into approving the project.

"Today’s announcement only further cements California's national leadership in solar energy development," he said.

The permit Salazar signed follows by less a week approval of the project by the California Energy Commission.

He said other large desert solar projects will be approved in coming weeks.

The fast-track approvals, Salazar said, are a change from old policies in which such proposals were mired for years in red tape. Projects on BLM land are being targeted for the right places from the beginning, he said, a process he called "smart from the start."

The Imperial Valley project relies on Stirling engines, which use hydrogen to convert heat into mechanical energy, which is then turned into electricity. That's in contrast to photovoltaic panels, which directly convert the sun's light into electricity.

Skeptics worried that the engine's reliance on mechanical parts may make them less reliable, a charge that Stirling denies.

Developers of big projects like this are rushing to start construction because of a year-end deadline for getting federal stimulus funds and loans.

This project is getting $273 million in federal stimulus grants in lieu of a 30 percent tax credit, Salazar said. It is also getting federally backed loans.

The project was initially opposed by environmentalists who said there are better places for solar development than desert landscapes that are home to sensitive species like the flat-tailed horned lizard and the peninsular bighorn sheep.

Indians said they were concerned about the impact on sacred sites and history buffs said it will hurt a historic trail. The Department of Interior said those issues have been dealt with.

San Diego Gas & Electric has agreed to purchase power from the project. It has a firm contract for 300 megawatts to be provided by the first phase, and an option for the second phase.

Power from the first 300 megawatt phase can get to San Diego through an existing power line that runs through the project, the Southwest Powerlink. But the full project can't be built until a second line, the Sunrise Powerlink, is in place.